Daily Archives: September 5, 2009

Thieves never sleep. Salt water fishing fee tripled two months after first imposed

Connecticut fishermen with long memories may remember when, this past June, our legislature imposed a new fee for fishing in salt water, a body of water that costs the state exactly nothing to stock or maintain. $10 for residents, $15 for non-residents, so that, if your adult children visited for a weekend, you could pay an extra hundred bucks to Hartford.

When they weren’t hanged by angry fishermen (most fishermen I know weren’t even aware of the law, slipped in at the last minute as it was), those solitaire-playing looters went back for more this week, raising the fee to $30 for residents and $60 for non-residents. As I wrote last week, the Connecticut legislature quadrupled spending (in inflation-adjusted dollars, no less) from 1987 to 2009 while the state population grew by just 250,000 souls. At some point, taxpayers will realize that these people have no – NO – plan to cut spending or diminish their power, ever. The saltwater fishing fee is just one tiny example of the mischief they’ve been up to. Wait and see what else crops up in the next few weeks as we discover what they’ve done. And next year? They have another $8 billion of ‘absolutely essential” spending to cover with more fees and more taxes.

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Go Dems, go!

CBS ran a story tonight on the drought afflicting California’s vast farmlands and included teary vignettes of hundreds of thousands of farm workers thrown out of work, crops never planted and ruined farmers. Amazingly, the report actually mentioned the cause of this man-made drought: the EPA and its battle for little fish. The full story was written up by the Wall Street Journal, but the average citizen doesn’t read the WSJ.

What I find encouraging about all this is that, finally, everything curmudgeons like me warned about is all coming true, at the same time. The minimum wage was raised and, sure enough, just as predicted, teen-aged unemployment hits a record. Minnows vs. humans, humans lose. This is why i’m so enthusiastic about compact fluorescent bulbs because, while the ordinary voter may not care about an unemployed teenage in the ghetto, he damn well is going to notice that he can no longer fit a bulb into his overheads and the bulbs he does buy cost fifteen bucks. Same thing when lettuce disappears from the supermarket, and pickup trucks from the dealerships.

So pile it on Obama, Nancy, Henry. The more and the faster, the better. You’ll either complete the ruination of the country or spark an outrage that will make recent demonstrations at town halls seem like, well, tempests in little tea pots.

Here’s some of the Journal’s opinion piece on that fish, if you’re curious.

In 1931, a severe drought began that within a few years engulfed the Oklahoma panhandle and a third of the Great Plains in a “Dust Bowl.” Tens of thousands of people fled the region—many traveling to California along Route 66, which John Steinbeck called “the mother road, the road of flight” in “The Grapes of Wrath.”

A lot of the “Okies” settled in the San Joaquin Valley. In the decades that followed, state and federal officials built dams and other irrigation projects that helped turn the valley into some of the world’s richest farmland.

But today the San Joaquin Valley is being transformed into a dust bowl. Hundreds of thousands of acres are fallow, while almond and plum trees are being left to die in the scorching sun. Tens of thousands of people have been tossed out of work—the town of Mendota alone has an unemployment rate of about 40%—and the lines for food donations stretch down streets. The reason? There isn’t enough water to go around this year, and the Obama administration is drawing up new reasons to divert more of it from farms and people and into the San Francisco Bay.

The valley has traditionally been a place where someone with few belongings, little education and even no ability to speak English could prosper by picking grapes, milking cows, or hoeing cotton fields. The hearty people who came here were Portuguese, Mexican, Armenian, Italian, Basque and Dutch, along with westward-traveling Americans and Okies. More recent arrivals are from El Salvador, Vietnam and India. I am the product of a Portuguese family that came decades ago.

California has the largest water storage and transportation system in the world. With 1,200 miles of canals and nearly 50 reservoirs, the system captures enough water to irrigate about four million acres and provide water to 23 million people. In many cases, as with the San Joaquin Valley, water in this system is sold to communities by the federal government.

Some claim that California is facing a three-year-old drought. But, according to the state’s Department of Water Resources, California reservoirs have received 80% of their normal amount of water and precipitation in the northern Sierras has been 95% of its yearly average this year. So why isn’t there more water for farms? Because theirs is a regulatory-mandated drought. The 1973 Endangered Species Act requires that the government take steps to save endangered species. In California, that’s meant diverting vast sums of water into rivers and streams to protect fish. Those diversions this year have forced federal authorities to decide who to serve—fish or farmers.

On Dec. 15, 2008, the Bush administration’s Fish and Wildlife Service chose fish, a decision driven by a lawsuit filed in federal court in 2006 by the Natural Resources Defense Council and other environmental groups. To settle the suit, the Fish and Wildlife Service agreed to divert more than 150 billion gallons of water this year away from farmers south of San Francisco in hopes of protecting the Delta smelt—a three-inch bait fish. The water is now flowing underneath the Golden Gate Bridge and out into the Pacific Ocean.

Of course, the Delta smelt isn’t a particularly attractive species to protect when it means throwing Americans out of work. On June 4, the National Marine Fisheries Service declared that delivering water to farms in the San Joaquin Valley would harm killer whales in the Pacific. And to save the whales, the Obama administration is now demanding even greater water restrictions beyond what has been diverted for the smelt.

There are 130 animal species in California on the federal endangered list, including five salmon species, five steelhead species, four trout species and the North American green sturgeon. To date, not a single fish within the California water system has been removed from the Endangered Species List over the past 35 years. Despite massive amounts of water diverted to help them, the “protected” smelt, sturgeon and salmon populations have continued to decline. It is hardly unreasonable to ask why farmers should continue to suffer if diverting water hasn’t even helped the fish.

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Ever hear of the FHA? You will

The Federal Housing Administration has insured mortgages for 75 years but its low limits meant that we didn’t see FHA loans much in Greenwich or other pricey neighborhoods. That changed in the last two years after other lenders quit lending and Congress boosted the loan guarantee ceiling to $750,000. As the result, FHA’s percentage of mortgages in the U.S. went from 3% to 25%, mostly to borrowers who didn’t qualify for loans from lenders who cared about getting their money back. Now there’s a wave of defaults coming and guess who’s going to get the bill? From the Wall Street Journal:

As private lenders sharply curtailed credit when boom turned to bust, the FHA became one of the only places to turn for buyers who couldn’t afford big down payments or who wanted to refinance but had little home equity. The number of loans backed by the agency has soared, and its market share reached 23% in the second quarter, up from less than 3% in 2006, according to Inside Mortgage Finance.

The FHA’s growing role has been cheered by economists, the real-estate industry and members of Congress who felt that it prevented the housing collapse from being worse.

Even as the FHA tightened lending standards moderately last year, Congress allowed the agency to make much larger loans, up to $729,750 in the highest-cost markets. Previous loan limits, at $362,000, had kept the FHA out of more expensive markets, including some of the hardest hit during the housing bubble. In July, California accounted for 13% of the FHA’s mortgages, up from 1.5% in 2006.

Mounting losses have eaten into the FHA’s cash cushion. Federal law says the FHA must maintain, after expected losses, reserves equal to at least 2% of the loans insured by the agency. The ratio last year was around 3%, down from 6.4% in 2007.

FHA officials have refused to comment on whether the reserves would fall below the 2% level, but say that even if that happens, the agency is adequately capitalized.

Some housing analysts believe that deep losses could spur even tighter restrictions. “It absolutely changes the political dynamic once you have to ask taxpayers” for money, said Lisa Marquis Jackson, vice president at John Burns Real Estate Consulting in Irvine, Calif.

Last month, the consultancy wrote in a note that mounting losses could lead to an “imminent pullback” from the FHA, and the firm has been warning investor and home-builder clients: “Be prepared for this to happen in some way, shape or form.”

Members of Congress have voiced concerns over the agency’s reserves. But many may balk at raising new hurdles for borrowers.

 

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Ah, you’ll take a voucher, won’t you?

Schwarzenegger offers $100,000 reward for capture of LA arsonist.

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Speaking of confused

Transexual rapist, murderer ordered moved to women’s prison under EU’s “Right to Privacy” rules. Do you ever get the feeling that the world has lost its friggin’ mind?

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Are you a girly-girl or a man?

A reader asked about the sex of readers of this blog and I’ll confess that I have no idea. So I thought I’d take a poll. By typing in an answer below this site’s amazing DNA scanner can determine your sex. Go ahead and try it – you might be surprised to learn something new about yourself!

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28 terrorists seized on Greenwich Avenue

Load and lock, fellas, there's bad guys out there

Load and lock, fellas, there's bad guys out there

“Next week it’s back to those drivers who use a “Greenwich stop” at stop signs”, Chief Ridberg declares.

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Scusie scoop: Stephanie Seymour kisses, makes up

Bared her soul in court

Bared her soul in court

All is well up on North Street where Peter Brant’s wife Stephanie and the security guard she tussled with have made up and forgiven each other.After court (presided over by Judge Judy) they all: Stef, Pete, the guard and of course, Frank and Cathy Lee Gifford and Regis all celebrated at Valbella’s and then went shopping at CVS.

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Cause and effect: minimum wages and teenage unemployment

Teenage unemployment hits record 25.5%. Economists who argue that raising the minimum wage are accused by do-gooders of being cold hearted bastards with no regard for the prototypical 16 year-old mother of three who needs more than the minimum wage to get by. Better they have no jobs than they work for less than the liberal’s definition of “a living wage”. Of course, with no job experience they won’t ever be in a position to earn a living wage, but that’s what welfare and a permanent reliance on the masters of Washington is all about.

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Your money vs. other’s

The SEC analysis of its bungling of the  Madoff matter is producing lots of interesting tidbits, including the fact that Renaissance Technologies grew suspicious of Madoff back in 2003 and eventually pulled its investments from him.

[….] Henry Laufer, Renaissance’s chief scientist, expressed amazement at Mr. Madoff’s ability to exit the market, selling its investments and holding primarily cash in a way that consistently staved off losses other investment firms suffered.

The timing of the moves, Mr. Laufer said, was almost statistically impossible. Mr. Laufer told the SEC in testimony earlier this year that “we would have loved to figure out how he did it so we could do it ourselves.”

He added: “And so that was very suspicious.”

Renaissance didn’t pull its Madoff investments immediately, according to the report. Nathaniel Simons told regulators that one reason was that the firm believed the SEC had closely examined Mr. Madoff’s investments, and that regulators could readily perform the same analysis Renaissance did of Mr. Madoff’s trading strategy.

“[Y]ou just assume that someone was paying attention to make sure that there was something on the other side of the trade,” the younger Mr. Simons told the SEC.

“We did feel that despite the fact that we’re kind of smart people, we were just looking at matters of public record,” he said, according to testimony in the report.

However, Renaissance’s discomfort with Mr. Madoff became greater, prompting the firm to withdraw money from the investments, people familiar with the matter said. Earlier this decade James Simons urged investors he knew also to withdraw, they said.

Renaissance employees expressed dismay to the SEC’s watchdog unit this year that regulators hadn’t unearthed Mr. Madoff’s fraudulent trades. “This is not rocket science,” Mr. Laufer told the inspector general’s office, according to Friday’s report. He added that an SEC examiner could “wander down, you know, to Goldman Sachs and wander over to their options department and ask them, how does somebody execute $10 billion of options, and find out it’s very difficult.”

So where was Walter Noel during this period? He and Andres were selling up a storm, pulling friends into the Madoff vortex not warning them away as Mr. Simons did. Why? I suggest that Simons wasn’t running a fund feeder, so he couldn’t pocket 20% of the illusory profits Madoff was claiming. And that affected his judgment.

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